A new study in the Journal of Consumer Research shows that using a credit card induces euphoria.

Like a starry-eyed new lover who ignores the downsides of an obviously incompatible but very attractive partner, consumers who swipe plastic when they buy are often blinded to the true costs of their purchases. They even tend to exaggerate the perceived benefits of whatever they’re buying, according to research by Promothesh Chatterjee of the University of Kansas and Randall L. Rose or University of South Carolina.

This research actually goes well beyond what we’ve known previously about the impact of credit card use on consumer behavior. The old information  that consumers tend to spend 15%-30% more when paying with plastic  was bad enough. It turns out that our actual perceptions of products is different when we’re paying with a credit card. Sounds crazy, but here’s the research.

Researchers primed subjects using traditional behavioral study methods, such as making them play words games which focused their attention either on credit cards or on cash. Then they gave the consumers information on items they could theoretically buy, such as a notebook computer or an iPhone. Repeatedly, consumers “primed” to think about credit cards had a harder time recalling products price or other downsides.

Our findings suggest that marketers may be affecting not just the amount of money consumers are willing to spend but also the nature of the goods and services that find their way into consumers market baskets, the report says.

…the economist Emek Basker has found that in the US, where the Christmas shopping season varies between 26 and 32 days depending on the date of Thanksgiving, longer seasons mean more overall spending (about $8 per person per extra day).

I just read today’s Sunday paper, and it sparked more discussion than usual in my family. The myths, exaggerations, misconceptions, and misuse of statistics is infuriating and serves nobody well (except perhaps “the media” itself, though only in the short term).

I ran across this illustrative post last week. What does it really mean to be poor in America?

Understanding Poverty in the United States: Poverty USA
Today, the Census Bureau released its annual poverty report, which declared that a record 46.2 million persons, or roughly one in seven Americans, were poor in 2010. The numbers were up sharply from the previous years total of 43.6 million. Although the current recession has increased the numbers of the poor, high levels of poverty predate the recession. In most years for the past two decades, the Census Bureau has declared that at least 35 million Americans lived in poverty.

However, understanding poverty in America requires looking behind these numbers at the actual living conditions of the individuals the government deems to be poor. For most Americans, the word poverty suggests near destitution: an inability to provide nutritious food, clothing, and reasonable shelter for ones family. However, only a small number of the 46 million persons classified as poor by the Census Bureau fit that description. While real material hardship certainly does occur, it is limited in scope and severity.

So, “poverty” suggests near destitution (and certain groups are getting as much political and alarmist mileage as possible out of that suggestion), but what does it really mean? Click through the article to see.

What really gets my goat is when “they” take a statistic (1 in 15 Americans) and illustrate it with an outlying example, then trumpet about as if the entire named group is comprised of people just like the example. The “I am the 99%” photos going around Facebook are a good example. Most of them are NOT the 99% – they are the most unfortunate 0.05% of the 99%. They are part of the 99%, but certainly are not the most accurate characterization of that group.

I can understand that customer service might not be as important if youre a company working on volumes with extremely small margins, but if youre a service company, such as a restaurant, the experience your customers receive will ultimately affect the amount of business you generate. Such a simple concept, do right by your customers and they will come.

Which is why it baffles me when restaurants get this completely wrong. To show what Im trying to explain, Ill share with you the terrible experience I had recently eating lunch at Pizzadelic (a local Pizza restaurant). This includes having someone elses bill in my pizza crust!

How you treat your customers has a HUGE impact on how your company is perceived. Good service-oriented companies know that people will buy more and more quickly if they know any defects or problems, or even second thoughts, will be dealt with in a comfortable, friendly manner.

All that said, I had an experience last week that must be published.

Almost a year ago – call it 330 days ago, I managed to purchase a laser rangefinder (Sightmark brand). It was heavily discounted and much cheaper than most rangefinders — but still more than I really wanted to spend. I used the rangefinder one time in October, and it worked delightfully and proved to be very useful. I tried to use it on a very cold elk hunting trip, and it failed on me. I assumed it was a cold-induced weak battery. When I got home, I bought replacement batteries and thought no more of it. I replaced the battery and tried to use the rangefinder this September and found that it still did not function — and it had a rattle. I opened the case and found that a part had come unglued – maybe because of the cold.

So – now I have an expensive toy almost a year old that doesn’t work. Good news – Sightmark’s manufacturer warranty is one year, and I have a couple of weeks in which to act. Bad news – Sightmark no longer sells any kind of rangefinder. They told me they could not repair it, probably would not get a refurbished unit any time soon, and they could offer me credit (not cash) toward something else I don’t want. My best bet “since I still have the receipt” is to “take it to Big 5 Sporting Goods” where I bought it in the first place. As If.

So, since I don’t currently want anything Sightmark sells, I took my 330 day old receipt to Big 5 Sporting Goods, with expectations of rejection. I spoke with Jason, who happened to be the manager on duty. He explained that the closest comparable unit was not really comparable – it’s $100 more and has never been on sale. He offered a modest discount and I offered that they could cut further into their margin to make me happy. For the record, I actually offered to split the difference, which would leave me $50 out of pocket. Jason told me that he did not have the authority to discount that deeply, but — and here’s where the lesson starts — “corporate” did have that authority, they often were willing to work with customers like me, and he would send an email to start the discussion.

This all happened on a Friday, so I had to wait until Monday to check back. I didn’t get to it on Monday, and called on Tuesday, when a different manager was on duty. She picked up on my issue and realized that there was an email for me. “Corporate” gave the go-ahead on a discount to $139 plus a 10% discount if I signed up for their email list. That brought the price down to three cents over my original purchase price! On top of that, the manager found a loose nickel and paid the balance for me.

I started this whole process a year ago with the opinion that Big 5 was a discounted close-outs, buyer beware kind of place. I had an item almost a year old that the manufacturer wouldn’t support, and Big 5 (and Jason) stepped in with compassion and respect and made me more than whole. I now have a better Simmons rangefinder, I’m not out any money, and I have a very different impression of Big 5. Thanks Big 5, and Jason in particular.

I stumbled upon these two gems in close succession. Regardless of how you feel about the competing budget “plans,” the debate is absurd.
Paul Ryan puts it beautifully in this clip:

Lets pass a bill to cover the moon with yogurt that will cost $5 trillion today. And then lets pass a bill the next day to cancel that bill. We could save $5 trillion.

He [Ron Paul] puts it more seriously in this post:When a cut is not a cut

One might think that the recent drama over the debt ceiling involves one side wanting to increase or maintain spending with the other side wanting to drastically cut spending, but that is far from the truth. In spite of the rhetoric being thrown around, the real debate is over how much government spending will increase.
…
In reality, bringing our fiscal house into order is not that complicated or excruciatingly painful at all. If we simply kept spending at current levels, by their definition of “cuts” that would save nearly $400 billion in the next few years, versus the $25 billion the Budget Control Act claims to “cut”. It would only take us 5 years to “cut” $1 trillion, in Washington math, just by holding the line on spending. That is hardly austere or catastrophic.
…
In Washington terms, a simple freeze in spending would be a much bigger “cut” than any plan being discussed. If politicians simply cannot bear to implement actual cuts to actual spending, just freezing the budget would give the economy the best chance to catch its breath, recover and grow.

Cowboys & Aliens, Smurfs Tie at Box Office with $36M Each – TIME
For many, the surprise this weekend was not that The Smurfs did so well but that Cowboys & Aliens had such a wan debut. With a budget of $163 million, plus another bundle for marketing costs, the film mostly attracted the geezer demographic (63% of the weekend audience was over 30), and even with that, it managed only a mediocre B CinemaScore, which bodes ill for the movie’s shelf life. Universal publicist Paul Pflug wrote in an e-mail on Sunday that “the pedigree of the filmmakers and bold concept made the film a bet worth taking.” Yet plenty of indicators could have warned the sponsors of Cowboys & Aliens that this was a sucker’s bet. Here are four: